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tv   Taking Stock With Pimm Fox  Bloomberg  January 13, 2014 5:00pm-6:01pm EST

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>> this is taking stock for monday, january 13, 2014 peered i am julie hyman. we focus on dealmaking. billions of dollars of deals involving google, charter communications, time warner cable. we break down the latest on these deals. we head out to the detroit auto show. major automakers unveil their new designs. you will meet in executive back to make a bit cornwallis in seconds. sterns.s with olivia
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>> charter communications has offered to buy time warner cable for $132 per share. billion.t at $61 includes $83 in cash per share at about $49 in stock. bell,r big deal after the google has landed nesslamb. they will continue to operate under its own brand. rose last month in china. >> chart medications. buyter has made an offer to time warner cable peered joining me with details and reactions, we have alex sherman and the chairman of media more. thank you for joining me.
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you broke the story, alex. apparently time warner cable has already said it is not going to be satisfied with the price they were given. >> we heard in the story that was telling his associates they don't except -- expect time warner to except that amount. i was talking to a source familiar with the situation and this person told me that 132.50 is a starting price in the sense that if time warner will not engage, why even both? er? >> why isn't time warner cable in gauging on this in order to try to negotiate a higher price? >> i think the game has just begun. as you can tell earlier when
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comcast and at&t broadband happened, it took five months to actually get a solution. toy ran from what $1 million $52 billion. there are two big reasons. time warner cable thanks bingo at ithehinks they can go alone. >> can they go it alone? is that reasonable for management to think that? >> they have a new ceo and they are rebuilding their management team. they had declined over the last several quarters. i think they have the right team in place. are still other potential suitors out there. there was no telling if this deal will go through and at what price it will go through and actually who would even buy time warner cable. >> there is the possibility that charter would team up with comcast or cox.
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those companies are monitoring the situation but the question will be if charter will partner with them. or will comcast megabit per the whole thing. there may be some regulatory issues if that happens. there are combinations that could come together. this is a formal stake on the ground that says that this process is being acknowledged and we are going to move forward. the next steps are to be determined. it's possible that charter could nominate a board of directors so that when time warner cable has its annual meeting in may, charter says nominate these people, they will get a deal done. time warner may resist that. >> i am exhausted just hearing about this back and forth. line here to get leverage when it comes to negotiating? is that what it is all about? is there a commendation that had the best chance at doing that? >> at the end of the day, it is
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about leverage against the infrastructure providers and content companies. there will because -- a cost savings of the companies come together. if you look at the adelphia deal. and theythree-way deal exchange systems across different yard is to make them more geographic. each system inside the cable company is pretty much downloaded. there is president and the industry for companies teaming up together. be any think there will regulatory hurdles at the two companies came together. >> i found the speech a really interesting in your story. time warner cable is notorious with terrible customer service. charter says that they are good with customer service and could help them out. is that going to be a compelling argument?
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>> historically, they haven't but it has been one of the main things that he has told me time warner cable want to improve. it seems to resonate now even if it hasn't in years past. charter also was notorious for bad customer service but that was before the era of the new ceo. they have improved the customer service. he did the same thing when he was ceo at cablevision so he hes have a track record but will get his chance as ceo to see if he can improve time warner cable if no deal is done. >> when it comes the cable companies, they have an uphill battle. thank you so much. alex sherman who broke this story. we appreciated. as we mentioned, that was not the only deal that was announced after the bell. google is looking to go deeper into the devices market by
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acquiring that the lab -- nest lab. i am joined by jon erlichman. becauses is amazing report $2 billion is a pretty big number and i think it is safe to say not many people have heard of the national labs -- nest alab. sure ite wants to make is going rall the devices are going. i just got back from the consumer electronics show in las vegas where a big scene of the internet of everything. tablet, now your car is connected to the internet. all the stuff in your kitchen is connected to the internet. nest is a company that is taking a technology mindset to some stuff that you would normally find in the home. the guy behind this gets a lot of praise for being one of the designers of the ipod. thisnt on to discover
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smoke alarm. they've been working on a lot of other stuff. when a lot of people look at this business, if there are going to look at the perspective of who would be interested in silicon valley and the next business -- apple comes to mind. maybe google less so but now that you have his deal, you say, maybe apple is working on hundreds its -- on its own stuff. google has always had this willingness to go out and buy stuff to get access to smart people with a roadmap and use all the resources that google has to do battle in another area and in this case we are talking about the connected home and the connected kitchen. which think about samsung had a massive presence at the consumer electronics show, they are already doing a lot of this. when you think of the key competitors to google whether it is apple or samsung, this starts to make sense and follows an
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interesting deal they did in the robotics area not too long ago. >> i don't know much about nest labs. have people actually bought the products already? are they in homes? >> this is a private company so there is so much you could know what a lot of people look at a guy like tony as one one of the smart thinkers who was think about product first and design. going back to the drawing board and thinking how we could do this better. making experiences like the thermostat and the smoke alarm a better experience. they do it the same way elon musk has been doing it for the tesla products. as for paying more than $3 billion for this business, is that what it's worth? it's worth it to google to be able to push further into this area. it makes you wonder how many different things nest is already
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putting on its drawing board in terms of this whole big theme of connected home. to be following you wherever the devices are going and we have seen that with this deal and the recent push into robotics, their push into health care, and just try to cover all of their bases. it is a company that is willing to go out and spend money to do that. it makes you think back to the purchase of android which ended up being the loop -- the blue print to their mobile strategy. nest becomes the blueprint for the strategy and the connected home. julie? >> thank you. really interesting acquisition here. google buys nest labs. we are not done with the deal. we are going to be talking about a major shakeup. we will tell you what the japanese company is paying a big premium for an iconic u.s. brand.
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>> there has been a major shakeup in the spirits industry. a japanese giant agreed to by foriconic u.s. company beam $16 billion. for more on what the deal means for these two companies and industry, i am joined by a food and beverage analyst who covers being. am. the managing director at cappello capital. to share with you -- start with you because i said this was a major shakeup. what does this do for the industry? what we see happen to the flow beverages? we will be so sure
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thinking a lot of japanese scots anytime soon -- scotch anytime soon. it enhances the -- the distribution footprint. consolidation the in the spirits business and alcoholic beverages and generally has been moving along at pace and this is the next step. kulaks i am curious about the price on this because by all accounts is premium that they paid is relatively high when you look at other average companies. what are they looking to do here? what do they really get out of this deal? >> strategically it makes sense. regardless of how be am that -- it tooes, they will take the asian markets. they can go out to the big spirit companies out there. they are able to take advantage of a strong yen to get this
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done. this deal could be genius by them if the currency markets continue on the way they are and by borrowing in yen and making money in u.s. dollars, that currency relationship could be huge for them and profitability -wise it could be off the charts. >> are there any cultural challenges in this kind of deal? there will be some issues. >> tim, go ahead. buthere will be some issues the business will still be run out of illinois and i feel like the players would not change very much in the u.s.. this is about enhancing the international distribution. say, i don'tg to
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see this as risky. obviously with any cross-border deals, you have integration risk, currency fluctuation, among other things. we are seeing a lot more risk being applied to the emanating markets. moreu think we see consolidation and beverages? >> it is possible. with this deal you are not creating the world's third-largest beverage company. more consolidation but i think after this deal for the time being, you are going to be where you are at today. >> what do you think, tim? surprised to be see more deals. one of the things we think that
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onstolationly -- c brands which is a wine company. they may think about selling their spirits business if the multiples we are talking about are 20 times this. >> who would buy something like that? >> it could be any number of players because it is a small portfolio. there is been a speculation about the relationship between bacardi.meman and both our family controlled companies so will not happen if the families wanted to happen. >> make you so much and cheers. we are talking about this deal. tim and gene, thank you. up, the largest health-care investment symposium and industry kicks off today in san francisco. i will talk to key player in the
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industry. that is next on "taking stock. " ♪
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>> the latest government data shows 2.2 million people signed up for the affordable care act. that was a sevenfold jump in federal sign-ups last month and 79% of those who enrolled also requested financial assistance. 70% of the sign-ups were over the age of 34, a third were 55 years and older. what does this mean for the health insurance industry? has been plan getting a lot of attention. by mike and seven
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cisco -- in san francisco. is the hot topic about the affordable care act and the repercussions? >> it is a very positive industry and meeting. very upbeat. the affordable care act is the main topic. have been one of the early winners within the short medical coverage you offer. talk to me about what it is and how it works. hashort-term major medical the same or similar -- similar coverages as the exchange program but it is 30% less. the product can be purchased online. the consumer can tailor make their product to their budget so if they want to add preventative care, etc. they can tailor make a program and be off and running. >> what is the difference
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between this and signing up with an exchange plan? is it shorter-term? what are the main differences? >> our products are available monthly depending on the state you're in. you can go to any doctor, hospital, you are not restricted to a certain network and you only pay $50 to visit a doctor. it is not forever one. it does not cover pre-existing conditions, maternity. for many americans it makes a lot of sense. >> it is for people who are healthy going into signing up for the plan. >> we accept 95% of all the folks who enrolled but there are five percent of the population who have diseases and we do not cover pre-existing conditions. >> some of the plant that people signed up for generally, if they don't meet all of the requirements than they have to pay penalties. does that apply to some of the
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plans you all have? >> in many cases it does, but even with the penalty, is less than half the cost. a family of four in texas are program is $3000. it is $12,000 in the affordable care act. when you see people can sign up for it for six months or 12 months, is there a limit as to how long someone can be covered under your coverage? >> if they purchase online, they pay by credit card, they can take it monthly. they simply stop payment when they don't need coverage. >> i am covered by this that i am curious about this potential customer base because it seems are prettyplans specific and they might appeal to a limited number of people with very specific needs. thet is a major part of population. one of the things we provide, we have over 10,000 guidance
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counselors that will take the consumers -- show the plans available on exchange, off exchange. it will compare benefits and rates. we will take the progressive model, we will make the recommendation to the sumer. >> your company just became public recently. was that pretty much panned to aca? what kind of coverage does the company provide before aca was enacted and what kind of appeal didn't have -- did it have? medical has been around for over 25 years. we spend the most on organic growth. happened when the affordable care act was placed a couple of weeks ago is that the marketplace is going to rise by as much as 300% primarily in the
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small groups. >> we have to leave it there. thank you so much. ♪
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>> of this is "taking stock." i am julie hyman. let's go to olivia sterns far headlines. >> google is acquiring messagelabs -- nest labs. they will continue to operate under its own brand. the deal is expected to close in the next few months. charter communications has offered to buy time warner cable that would value the cable provider at more than $61 billion. the proposal will include $49 in
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charter stock. ceo, no serious response has been given. estimates.ed it faces a rising competition from local dining chains. it only rose two percent. showe north american auto is underway in detroit. the top automakers will become unveil its products. matt miller is that the show. he is standing by with one of subaru's top executives. >> i know you are a fan of subaru. i am standing here with the president of subaru. the sti has been one of the most vaunted cars at the shows and it has not been released yet.
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people have been writing about it for days and weeks. what can you tell us? we are very excited to be back here in detroit because 10 years ago we launched the 24th -- 2004 model. >> now it is totally separate. >> it is his own car -- its own car. where else are you going to get sti performance? the price point and horsepower and all the utility of provides, it is the complete package. >> it is a total charged -- turbo-charged rally car. you have had the same kind of thing with a couple of other cars. one in orange. the kids just love it. >> crosschecked was a home run for us. we thought we would sell 1500 a
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month, instead we are doing 5000 a month. it has attracted a much younger demographic to our customer base that we had before. >> people think of subaru as a niche brand. you actually outsold ford wagon and the u.s.. that is the people's car and you outsold it. vehicles. many we are very focused on who our customer is. we know the type of demographic that tends to purchase a subaru. we go after those types of customers. >> investors have taken note. i wanted to mention, we have bloomberg have been watching the heavy industries. subaru is the main business. i think the stock is tripled this year. it is up or hundred percent -- 400%. >> analysts are realizing the
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value. when you look at the product line and you look at the fact we don't sell the cars with a lot of incentives. when you look at the fixed cost that it takes to produce the cars, it is a great profit vehicle and the exchange rate is working in our favor. >> what are the marketing costs? the only thing i could think of is the puppy super bowl but you do. >> we advertise on television and we do a lot of print and radio like other manufacturers. fromy to stay away customer back incentives. we believe our products have value and what to stress the value of the products. >> you are doing the kickbacks? >> we try to stay away from that. >> you do emphasize -- i am a huge dog lover. dog safetyy tested harnesses in some of your cars. >> we have worked with the aspca
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to develop a dog harness specifically for vehicles. you can purchase the dog harness. it keeps the dog safe and never strained so they don't become a flying object of the vehicle were get hit. >> it sounds like a big selling point. one of the problems you have -- you have had is that you can keep enough cars on the lot. does it anger a customer when they come and they want a n ew ew sti and can't find one? >> april are willing to wait for the vehicle because they will get the exact vehicle they want. it started around the earthquake time back in march of 2011. we do not think people would wait. we have learned that they are willing to wait for a certain. n period of time. >> i will bring brack a -- bri ng back a cross track. >> we will set her up.
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>> i'm ready. i don't need a dog harness no. though. thank you. next, we will be right back in detroit. matt will be joined by the man who usually sits right here -- pimm fox. .e will be talking baseball the saga of a rod continues at the new york yankees slugger is suing mlb now. we will have the latest on that. ♪
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>> this is "taking stock." i am in for pimm fox was out at the detroit auto show today. they are back joining us live for the show. what trend are you guys watching so far? >> i don't think i like the title of guru.
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>> that means you know what a car weighs. this is a situation where the f1 50 which is ford's biggest seller. it is trimming down because of aluminum. >> everybody talks about how their car weighs less. are using carbon fiber in everything from their entry-level electric car up through the m-series. have been using aluminum for over 20 years. >> the f-150 is different from an audi. it has to take a little more of a rugged hit because if you're going to have any kind of dent with an aluminum frame, what are you going to do? >> of that is the problem. it should be stronger and more
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resistant to dance but if you get a dent in the middle of new mexico, the local mechanic has no idea how to fix that and it is expensive. g.m. comes out and gets car and truck of the deal -- of the year. >> it was a no-brainer. if you look back at 2013 from any point in the future, it was all about the corvette. they have their new core fat -- corvette out. >> it was beautiful in yellow. i spoke to peter brock, the creator of the design of the stingray. >> of split window which was only made for one year. the truck of the year was the silverado last year. it is basically the corvette of this year. it is the most important unveiling and piece of news we are going to get at any auto show. >> the lightning of the f-140. 50.
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>> at the chrysler 200 was unveiled today and it looked rate. it looks like an alfa-romero. i lust after them and especially the 4c. it will be a while until it comes your. not until 2015. i was telling you before we came on -- it is not the new cars that have me most excited, it is the cars i fell in love with in the past that have new features. >> the shaker? isn't there a shaker on the challenger? >> the shaker on the hood of the dodge challenger. get the same ones from an old mustang. >> we be putting red flames on the back of the car? >> exactly. i will bring that back from me and you get the cross track. i> i avenue tyler for you, --
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have a new title for you -- auto nerd. >> enthusiasts would be better. are auto enthusiast/nerd s/gurus/ . bitcoin --according to my nest guest, it is like having a bank account only it takes a minute to get started and more secure than traditional banking. the first online bitcoin while but to reach one million users deals exclusively with bitcoins. we did 12 days of bitcoin and had some money stolen from a paper wallet that he try to give to adam johnson. walked me through how this works. how the wall that works --
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wallet works. >> this is two things. it is the world's most popular bitcoin website. it is a place you can go to study currency statistics. think like a google for the bitcoin world but also a wallet service. paper wallet is one way of storing your bitcoin but when you show someone a private key, they can spend that money. we are not going to show any private keys but we will go through the process of setting up a wallet which is a free service. since last week we announced a breaking news of that one million wallets were created, we have seen another 50,000 in the last seven days. we have seen fast growth. >> walk us through it and that we will talk some more about it and how it works. >> on the homepage of our half, you will see transactions moving across the it boy network in real time. right now, $13,000. when you are ready to crate a
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wallet, click the while the link at the upper right-hand corner and we will start now for free. you don't need a e-mail address but i will keep -- i will put one in here. create a quick password. >> nobody look at his password here. we don't want more bitcoins stolen. then you have to put in the code as well. >> one really important thing about this service is that we don't have access to any of your passwords. what is about to happen is they go in and are encrypted in the browser itself. how does the transaction actually happened? you deposit money from your bank and that goes directly into the wallet? >> it is true you can create a bank account with bitcoin. when you want to buy bitcoins,
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you can go to exchange or go directly to a company. there is ways of buying them fundly too but i will this wallet with my cell phone to conceal quickly it is to make a transaction. my password is not right here. i will pull one up here. once i find a wallet, it is easy to make a transaction. i will create one here. >> you can do it from your phone and from a bank account. then you actually by various things. if you use bitcoin for an increasing number of different kinds of transactions. >> once you have created a wallet, you can spend your bitcoins anywhere in the world. i earn my income and bitcoin. i travel with it and rent
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apartments all over the world. >> do you only buy things in bitcoin or do you convert your bitcoins into regular dollars? there are some places that probably only take cash or other bitcoin currency. 99% of my life using bitcoin for transactions. for a parking ticket, i probably have to take out my credit card. and youcreated a wallet want to make sure you get your password correctly. i will send some bitcoin over to this wallet. you take a picture of the key and it is really easy to send it. this happens basically anywhere in the world all the time. >> here is one of my questions when you are signing up which is so easy and great on the one hand, but on the other hand, when a bank -- you deposit your
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money in a bank, there is a guarantee you actually have the money. there is a credit check and some cases to sign up for various kinds of things. here, is theren any way to spend money you don't have? are there any safeguards? >> what i am going to talk about is yes, there are. there are different types of safeguards. this is really a wallet service that allows you to secure your bitcoins. when you are running an exchange, you are going to need to be compliant with some of those things. you can take it anywhere you go what you have a wallet. we funded the wallet with $20,000. anyone who has this little picture could semi-more money. turns up in dollars and not an bitcoins. >> you can switch it either way and we support people transition process to study their value anyway they want.
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it is written in a dozen different languages. >> thank you so much. the website allows you to store your bitcoins and monitor their value. coming up, in order to take -- a-rod his appealing to manhattan federal court. ♪
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>> this is "taking stock." following the decision of mlb's arbitrator, all its rodriguez' rodriguez's suspension will be reduced. millions in lose base salary and lost enforcements -- endorsements. he is suing mlb. i am joined by the director of
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the sports management program at st. john's university. evan, is this suit going to hold? what are the prospects? >> it will be difficult for alex rodriguez to win this. is veryal court, it difficult to overturn an arbitration ruling. time, a rod has made this out to be a witchhunt --the part of but ceiling bud selig. is there a vendetta at work or is he seeing things that is not there? >> i think he has a history of saying things. he has always been a lightning rod ever since he signed veteran -- that contract with the rangers. hee he earned i contract, has had that bull's-eye on his
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back and he feels that unlike the under par players -- the other players. they all played guilty. he chose to fight. originally it was 211 games. strong he willry probably never play major league baseball again. >> one of the questions we had with the suspension is that it seemed arbitrary. there was nothing in the cba that said he could do that. i was surprised to see the result being a 162 game suspension. where do you think that came from? >> i thought would hundred 50 games would be what we see. 211 we could not quantify. where did it come from? we are looking at a season-long suspension the matter what and as we have seen over the past day and a half with everything that is coming out, there was enough evidence to support a
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season-long suspension and that is what he got. outspoken -- most the witness and the situation is a guy named anthony. there have been some questions about his credibility. do you think he is credible when it comes down to it? >> the question is what benefit does he have about lying at this point? is he making up all the stories? >> attention? >> it could be. allcould also be, i assume his cooperation is helping him in the eyes of the federal government as well as mlb in terms of punishment. there is that thought and the back of your mind that maybe he is being forthcoming because he stands to benefit. >> this is one thing that a-rod has hammered a lot. anthony is someone to the press. baseball essentially sued bosh and then drop that lawsuit and turned for his cooperation.
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there is question about how legitimate his testimony is. >> it is all about confirmation. that is what we are forgetting about. evidence has been purchased imo be -- mlb. anthony bosque to confirm the evidence they had purchased. he did that whether we want to agree with this character or not. he did exactly what mlb needed him to do. >> the way a raw has taken this, we are getting away from that if he is guilty or not. the argument now is that the entire arbitration process was fair. >> do you think he will take the field again? >> probably not. i think it will be a monumental fight for him lately in the next weeks and months ahead. ch.thank you so muc
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this has been "taking stock." ♪
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>> live from pier 3 in san francisco, welcome to the late edition of "bloomberg west," where we cover the global technology and media companies that are reshaping our world. i'm emily chang. our focus is on innovation, technology, and the future of straight tot's get the run house. a service designed by the guy who helped to make the ipod. now he is selling nest labs to google for more than $3 billion. charter makes its


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